Can a pregnancy be an “accident”? Broadway producers argue that it can in $13 million insurance coverage action.
The 2017 Tony Award nominees were announced on Tuesday, and absent from that list—for good reason—was Tony record-holder Audra McDonald, who gave birth to a baby girl in October.
The 46-year-old actress had just opened a new Broadway musical, last year’s Shuffle Along, when she announced her pregnancy via Twitter in May of 2016. “Who knew that tap dancing during perimenopause could lead 2 pregnancy?” she tweeted. McDonald and her husband were “completely surprised but elated 2 b expecting.”
The pregnancy may have been a surprise—but was it an “accident”? That question lies at the heart of a lawsuit brought by the Shuffle Along producers against Certain Underwriters at Lloyd’s, London, which issued more than $14 million in coverage in the event an accident or illness kept McDonald from performing. The show closed early when McDonald’s pregnancy caused her to bow out of the production.
Lloyd’s denied coverage, concluding that the pregnancy and associated medical conditions were neither “accident” nor “illness” under its policies. The producers sued for breach of contract last November in New York state court, seeking to recover $12.7 million. According to the complaint, given McDonald’s “age and medical history, the news of her viable pregnancy came as a surprise to her and, consequently, to” the producers.
Two insurance policies are in play. The first, a “non-appearance” policy with $2.1 million limits, covered losses tied to the cancelation or interruption of up to 16 performances. The producers want to recover based on several shows McDonald missed due to illness and the pregnancy between May and July 2016.
On her doctor’s orders, McDonald did her last performance on July 24, 2016, and the producers chose to close the show on that date. They claim the show’s premature closure triggered the second “abandonment” policy—which covered up to $12 million in capitalization costs if the show had to be abandoned due to accident or illness. Ticket sales fell markedly for McDonald’s anticipated absence, and the producers said they closed in order to mitigate their losses.
Lloyd’s advances several defenses in its answer and counterclaim. Most fundamentally, Lloyd’s contends that pregnancy, “regardless of whether it is intentional, does not, in and of itself,” constitute an “accident” or “illness.” The insurer also argues that pregnancy was not beyond McDonald’s control, that abandonment of the production was not necessary, and that other factors—namely high production costs and low ticket sales—were behind the closure. Finally, Lloyd’s claims the policies are void ab initio based on alleged material misrepresentations made in McDonald’s medical history.
There’s no need to feel sorry for McDonald’s cast mates, two of whom now play Aaron Burr in the Broadway and national touring companies of Hamilton. (Heard of it?) For her part, Audra can be heard as Madame Garderobe in Disney’s live-action Beauty and the Beast—and she will sing with the Milwaukee Symphony Orchestra next year.
The case continues to, well, shuffle along—according to a preliminary conference order from last month, depositions of fact witnesses should wrap up by September, and dispositive motions would come in early 2018. The producers may be facing an uphill climb, but they are not throwing away their shot at insurance recovery. Stay tuned for updates.